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American Airlines files for Bankruptcy! How will this affect South East Asia?

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American Airlines files for Bankruptcy! How will this affect South East Asia?

Old 29th Nov 2011, 18:06
  #1 (permalink)  
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American Airlines files for Bankruptcy! How will this affect South East Asia?

In a development that underscored weakness in the United States economy, the parent company of American Airlines, the country’s fourth-largest airline operator, has filed for Chapter 11 Bankruptcy Protection.

AMR Corporation, the owner of AA, said that it had filed voluntary petitions for Chapter 11 reorganisation in the U.S. Bankruptcy Court for the Southern District of New York, “in order to achieve a cost and debt structure that is industry competitive and thereby assure our long-term viability and ability to continue delivering a world-class travel experience for customers.”

The action by AMR, which comes on the back of an ailing job market and unresolved budget deficit crisis, is likely to deepen concerns of slow economic growth and consequently fears of a double-dip recession.

AMR’s two key airlines, AA and American Eagle, were however said to be operating normal flight schedules, and said it was “business as usual” for customer reservations, customer service, and all similar operations. Normal flight schedules would continue, the airline said, adding that the filings would also have no direct legal impact on American's operations outside the U.S.

However court documents posted online and statements by AA to vendors, creditors and investors suggested uncertainty in terms of the company’s future prospects.

Thomas Horton, Chairman, Chief Executive Officer and President of AMR and American Airlines, alluded to competitive weakness and global economic factors saying, “Our very substantial cost disadvantage compared to our larger competitors, all of which restructured their costs and debt through Chapter 11, has become increasingly untenable given the accelerating impact of global economic uncertainty and resulting revenue instability, volatile and rising fuel prices, and intensifying competitive challenges.”

In a note to aircraft lessors, lenders and trustees, AA said “We plan to make payments when due of aircraft rent and mortgage principal and interest payments only on certain aircraft in our fleets,” adding, “Some aircraft leases will be rejected soon while others may be rejected later.”

The corporation further said to investors that it was not possible to predict what the ultimate value of AMR’s common stock may be or whether shareholders could expect any financial recovery in the Chapter 11 proceedings. It also warned that the New York Stock Exchange could delist AMR stock if its specific listing requirements were not met by AMR stock.

The Hindu : Business / Companies : American Airlines files for bankruptcy protection
guitarboy is offline  
Old 29th Nov 2011, 18:27
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It will effect South East Asia the same way, as when Kingfisher and or Air India files for bankruptcy, more business for competition!!
dragstar is offline  
Old 30th Nov 2011, 06:00
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No effect... business as usual. the bankrutcy filing is a ploy to have the courts avoid current labor contracts.
captjns is offline  
Old 30th Nov 2011, 06:32
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and to position it self for a merger. US Airways maybe?
johnnyramjet is offline  
Old 30th Nov 2011, 09:08
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Yank airline management does this all the time, whenever they get into a fight with the unions ... award themselves huge bonuses, bankrupt the company next day, give a big middle finger to their creditors, impose new contracts / pay cuts on all the staff, keep on flying. Every single US major has been through a couple of these
Luke SkyToddler is offline  
Old 1st Dec 2011, 13:49
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Nothing to worry about when you have a permanent job/contract job in South East Asia... But just in case they do go belly up, and some of them planned to join us here, they're all welcome....Sea East Asia, china and India has a whole lot of requirements for type rated pilots, esp on the A320's. The real question is, are they all willing to come here? I guess not...And besides, there will be a lot of airlines in the US whose probably gonna buy the company (AA) and merge all its assets...including pilots and crew, so I believe the effect in ASIA will be minimal....
Leemankin is offline  
Old 1st Dec 2011, 19:15
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At least the boys and girls at AA refused to knuckle under and roll over on it's back like a dog that`s ready to be kicked by it's master like the pilots from those other legacy carriers, who shall remain nameless, did.

The AA pilot group stuck to their guns and refused the 32 percent pay cut a few years back.

And you know what??? had they taken that paycut, I'll lay odds that the SOBs would have still filed BK.

Good luck to the folks at AA. At least you can walk with your heads held high with self respect.
captjns is offline  

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